Practice on signet before you use real bitcoin

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Most people set up a wallet and send it real money the same day. That is how small, avoidable mistakes become expensive. Bitcoin has test networks where the coins are free and worthless, so you can rehearse every step first.

What signet and testnet are

Bitcoin runs on a main network, called mainnet. That is where real coins live. Developers also run separate copies of the network for testing.

• Testnet is the older test network. Anyone can mine on it, so it can be slow, messy or flooded with blocks. It has been reset several times. The current version is testnet4, which Bitcoin Core added in version 28.0.
• Signet is a newer test network. Blocks are signed by a known set of operators, so it behaves predictably, like a calm version of mainnet.

Coins on either network have no value. Addresses look slightly different (signet and testnet addresses start with tb1 instead of bc1), and wallets keep them separate so you cannot mix them up by accident.

For practice, use signet. It is reliable and well supported by wallet software.

Why practice first

A cold storage setup has several steps that are easy to get wrong the first time:

• Writing down the seed words correctly
• Exporting a watch-only wallet to your online computer
• Moving an unsigned transaction to the offline device and back
• Checking the receive address on the device screen
• Restoring the wallet from your backup

If any of these goes wrong on signet, you lose nothing. You learn where the confusing screens are, and you prove that your backup actually works. That last part is the main point.

A backup you have never restored from is a guess. Practice is how you turn it into a fact.

Set up Sparrow in signet mode

Sparrow Wallet is a free desktop Bitcoin wallet that supports signet out of the box.

1. Download Sparrow from its official site and verify the download signature. The site explains how.
2. Open Sparrow. Go to Tools › Restart In › Signet. Sparrow restarts with a different color theme and a signet label so you can tell which network you are on.
3. When Sparrow asks how to connect, a public signet server is fine for practice. Server options change between versions; check Sparrow’s docs if the screen looks different.

If you plan to use the offline method from cold storage without hardware, do the same on your offline machine. Tails does not include Sparrow (it ships Electrum), so copy a verified Sparrow download onto your offline machine. Both copies of Sparrow must be in signet mode.

Create a practice wallet

1. In Sparrow, choose File › New Wallet and give it a name such as “signet-practice”.
2. Choose New or Imported Software Wallet, then generate a new 24-word seed.
3. Write the 24 words on paper, in order, exactly as shown. Treat it as if it were real. The habit matters more than the coins.
4. Confirm the words when Sparrow asks, then finish creating the wallet.

If you are practicing the offline flow, create the wallet on the offline machine and export a watch-only copy to your online computer. The steps are in cold storage without hardware.

Get free signet coins

Signet coins come from a faucet, a website that sends small amounts to anyone who asks.

1. In Sparrow, open the Receive tab and copy a fresh address. It should start with tb1.
2. Search for “bitcoin signet faucet” and pick one that is widely mentioned. Faucets come and go, so there is no single permanent link.
3. Paste your address and request coins. Some faucets ask you to solve a puzzle or wait between requests.
4. Wait for the transaction to appear in Sparrow’s Transactions tab. Signet blocks arrive about every 10 minutes.

Never enter a seed phrase, password or private key on a faucet site. A faucet only ever needs a receive address.

The full drill

Run through this whole sequence once. It mirrors what you will do with real money later.

1. Receive

• Generate a receive address in Sparrow.
• If you are using a signing device or offline machine, check that the same address shows on that device’s screen. On real hardware this check protects you from malware that swaps addresses.
• Send faucet coins to it and wait for one confirmation.

2. Sign and send

• In Sparrow, go to Send. Pay part of your balance to a second address in the same wallet, or back to the faucet’s return address if it lists one.
• If you are using the offline flow, save the unsigned transaction (a PSBT file) to a USB stick or show it as a QR code.
• Sign it on the offline machine or device. Check the amount and destination on that screen before you approve.
• Bring the signed transaction back to the online Sparrow and broadcast it.
• Watch it confirm.

3. Wipe and restore

This is the step most people skip, and the one that matters most.

• Delete the wallet from Sparrow, or on Tails simply reboot. Tails forgets everything by default.
• Create a new wallet in Sparrow using Import and type in your 24 words from paper.
• Check that the same addresses and the same balance appear.

If the balance shows up, your backup works. If it does not, find out why now. Common causes are a misspelled word, words in the wrong order, or a different script type (Sparrow defaults to Native SegWit).

4. Do it again on mainnet with a small amount

Once the drill goes smoothly on signet, repeat it on mainnet with an amount you would not mind losing. Sparrow’s Tools › Restart In › Mainnet switches back. Then, and only then, move larger amounts.

Practicing with a hardware wallet

Many hardware wallets support signet or testnet for practice, but support varies by device and firmware version. Check your device’s documentation. If yours does not, run the drill with Sparrow alone to learn the flow, then repeat it on mainnet with a very small amount using the device.

Common questions

Can I sell signet coins? No. They have no value and nobody buys them. If someone offers to, it is a scam.

Will practice wallets get mixed up with my real wallet? Sparrow keeps signet and mainnet wallets separate and shows which network you are on. Name practice wallets clearly anyway.

Do I need to keep the practice seed? No. Once you have finished, you can throw away the paper. Use a brand-new seed for your real wallet. Never reuse a seed that has been on a networked computer.

Next steps

• Pick a setup in Four ways to build a cold wallet, or use the interactive checklist.
• Learn how to make a backup that survives fire and flood in seed backups.